We came across a bullish thesis on Lantheus Holdings, Inc. (LNTH) on Value Investing Subreddit Page by Small_Bodybuilder_12. In this article, we will summarize the bulls’ thesis on LNTH. Lantheus Holdings, Inc. (LNTH)’s share was trading at $90.98 as of Dec 10th. LNTH’s trailing and forward P/E were 15.11 and 11.79 respectively according to Yahoo Finance.
A surgeon examining a cardiovascular diagnostic device in a hospital setting.
Lantheus Holdings, Inc. is a rapidly growing medical diagnostics company specializing in radiopharmaceuticals and diagnostic imaging agents, with a particular focus on oncology and cardiology. The company has demonstrated robust revenue growth, driven by its expanding product portfolio and increasing demand for its flagship products, including PYLARIFY, a prostate cancer imaging agent, and DEFINITY, an ultrasound-enhancing agent. In Q3 2024, Lantheus reported $378.73 million in revenue, reflecting an 18.37% quarter-over-quarter increase, bringing its trailing twelve-month revenue to $1.50 billion, up 24.15% year-over-year. This growth is underpinned by strong demand for PYLARIFY, which has rapidly gained market share since its 2021 FDA approval. PYLARIFY’s sales exceeded $400 million in 2023 and are expected to surpass $500 million annually by 2025, making it a key driver of the company’s future growth.
In addition to PYLARIFY, DEFINITY has been a reliable revenue generator, especially in echocardiography. With its recent approval in China, DEFINITY is projected to contribute an additional $100 million in annual sales by 2025. Lantheus is also enhancing its diagnostic capabilities by integrating radiopharmaceuticals like Neurolite and TechneLite with AI platforms such as PYLARIFY AI, which has improved diagnostic accuracy for prostate cancer imaging by 20%. This innovative approach, along with partnerships with major players like GE Healthcare and Ratio Therapeutics, has allowed Lantheus to expand its pipeline, adding $50–75 million annually to its R&D value. These collaborations contribute to the company’s long-term innovation in radiopharmaceutical therapies.
Lantheus’ revenue growth has been remarkable, increasing from $339.41 million in 2020 to $1.50 billion in 2024, representing a compound annual growth rate (CAGR) of approximately 40%. This growth is expected to continue, with forecasted revenue reaching $1.87 billion in 2025, $2.34 billion in 2026, and $4.58 billion by 2029. The company’s operating income is projected to follow a similar upward trajectory, with expected EBIT reaching $1.19 billion by 2029, corresponding to a margin of 26.02%. Net income is expected to grow from $134.88 million in 2025 to $684.13 million in 2029, reflecting a 14.94% margin.
Lantheus has also demonstrated a strong ability to manage its capital expenditures (CapEx), which are expected to grow modestly, reaching $96.33 million by 2029. The company’s free cash flow (FCF) is projected to outpace CapEx, indicating strong cash generation capabilities. The company’s financial metrics reflect improved operational efficiency, with a projected positive economic profit spread (ROIC – WACC) increasing from 24.59% in 2023 to 42.98% by 2027. Using a discounted cash flow (DCF) model, Lantheus’ enterprise value (EV) is estimated at $17.02 billion, representing a 186.61% increase from its current value.
Lantheus’ current valuation is highly attractive, especially when compared to its peers in the radiopharmaceutical sector. It has the lowest forward P/E ratio at 11.53x, compared to the group median of 18.2x, and its EV/EBITDA ratio of 9.11x is also the lowest in the peer group. Despite competing with larger players like Siemens Healthineers and GE Healthcare, which dominate the broader medical imaging landscape, Lantheus continues to carve out significant market share in specialized radiopharmaceuticals. Lantheus is well-positioned for continued growth and market share expansion, making it an appealing investment with substantial upside potential.
Lantheus Holdings, Inc. (LNTH) is not on our list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 35 hedge fund portfolios held LNTH at the end of the third quarter which was 34 in the previous quarter. While we acknowledge the risk and potential of LNTH as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than LNTH but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.